UBS Group AG

UBS reported second-quarter net profit of $2.8 billion and EPS of $0.87. On an underlying basis, pretax profit was $3.9 billion, up 45% year over year, revenue rose 16% to $13.3 billion, and return on CET1 capital was 16.4%. Operating leverage was 8 percentage points and the cost/income ratio was 70%. On a reported basis, pretax profit was $3.6 billion, including $352 million of revenue adjustments and $645 million of integration expenses. For the balance sheet, total assets were $1.7 trillion, CET1 capital ratio was 14.4%, and CET1 leverage ratio was 4.4%. Forward guidance included around $750 million of integration-related expenses in the second half, an effective tax rate of 23% full year, GWM NII up around 10% full year 2026 versus 2025, modestly higher GWM NII in 3Q, flat to slightly higher P&C NII in 3Q, P&C full-year credit loss expense below the prior estimate of around CHF 300 million, and NCL 2026 exit-rate operating expenses of around $400 million (excluding litigation).

Sergio Ermotti framed the quarter as evidence that the Credit Suisse integration is now paying off, with UBS close to restoring pre-deal profitability and building a more scalable franchise. He emphasized the One Bank model, record invested assets, strong regional performance, and completed client migration, while saying the firm is still investing in AI, digital assets, and infrastructure. His tone was confident but disciplined: he highlighted momentum and the ability to outperform targets, while noting geopolitical and macro uncertainty remain.

Todd Tuckner highlighted broad-based financial strength, citing underlying pretax profit of $3.9 billion, revenue of $13.3 billion, and return on CET1 capital of 16.4%. He said gross cost reductions reached $1.1 billion in the quarter, bringing cumulative savings since end-2022 to $12.6 billion, and noted the firm remains on track for its $13.5 billion synergy ambition by year-end. He also pointed to strong capital and liquidity, including CET1 at 14.4%, TLAC of $194 billion, an NSFR of 115%, and an LCR of 177%, while explaining that the new $3 billion buyback program lowered CET1 by about 60 basis points.

Analysts focused on the Investment Bank’s ability to grow revenues without expanding the balance sheet, the sustainability of strong Asia equities trading, U.S. wealth adviser attrition, and the new $3 billion buyback timing. Management said IB growth came from disciplined resource allocation, stronger intermediation in equities, and shifting capital toward higher-opportunity areas, especially while staying within limits. On U.S. Wealth, UBS said adviser exits should taper through 2026 but that timing lags in reported headcount make the trend noisy; on the buyback, UBS said the end date to June 2027 reflects uncertainty around capital requirements and the need to preserve a CET1 ratio around 14%.